Answered: What are the four small business…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

What are the four small business concession for Capital Gain Tax?

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Expert Solution

Step 1

The SBC will enable you to considerably reduce any capital gains tax (CGT) that you may pay on the sale of your firm if you prepare ahead. It's critical to understand the requirements for obtaining Small Business Concessions when selling your company (SBC). There are four sorts of concessions available if you meet the requirements.